Wealth Checklist - Day 5 - Your Net Worth

Each evening this week will be a little task for you to complete to refresh your finances and feel a bit more put together. This is day five, find day one here, day two here, day three here and day four here.

That’s got to be worth a try!

Day Five - Work Out Your Net Worth

Your Net Worth

I wrote a handy dandy guide to working out your net worth some time ago - you’re welcome.

Your net worth is everything that’s left when you take away what you owe from what you own. It’s a simple metric, not the only way to assess how you’re doing financially, but it is a tool in your arsenal and it’s a low barrier to entry. It might take some time to work out the first time, getting everything together, but then you have the basis on which to update the next year (or quarter, or month if you’re really on it!).

Over time is where the real magic happens. The movement of the figures up or down, show you the effects of the financial choices you’ve been making. From there, you can decide whether to keep making the same choices or redirect your flow.

If You’re Starting From Nothing, Personal Finance Wise:

This is a great place to begin tracking your wealth.

Building some momentum. Getting your brain used to looking at the facts rather than ignoring or hiding from them. Becoming familiar with assessing the data and watching for trends upon which you can make your decisions - rather than panic or whimsy.

Although there’s space for whimsy in personal finance as far as I’m concerned.

I saved this one until the weekend because it will take a little longer than the others. It’s a bit more involved, but if you’re ready to take a hold of your personal finances, and make some good money moves - set yourself up with a cuppa, maybe a journal you’ve been saving for best and some fun pens and get going!

My Top Tip For Working Out and then Using Your Net Worth

Is to keep your workings.

You’ll probably want to neatly get it all into a spreadsheet or one lovely journal page by the end but if you’re scrabbling about getting passwords and remembering odd savings accounts here and there, use the time to jot down clear notes about what you’ve sorted out.

Maybe you realise your mortgage will be due for renewal later this year? Don’t get distracted and start looking into it now, make a note to come back a month or two before the deadline.

Another common situation is being faced with issues you were trying to avoid for example, a loved one left you some money in their will and you couldn’t face it at the time so you whacked it in a savings account until you could and now it’s three years down the line and that money has been sat there earning 3% and therefore losing money. Again, don’t get distracted, write your note about what’s to be done and also how it’s making you feel and move to the next thing for now.

Make sure to come back later.

That Concludes Our Wealth Checklist Week

I’d love to know if you’ve been playing along! I’ve got a whole other week planned out already, but I’ll give you some time for these nutrients to settle first. So much good stuff still to come!

Love Eleanor. xxx

P.s. If you enjoyed this and want to explore more about good, solid, personal finance - join up to the free newsletter - every week there’s a question, task and quest to help you align your finances with your values.